From Barron’s: 2025-05-03 11:53:00

CEO Warren Buffett expressed concern over the new 1% tax on share buybacks, stating it makes it more expensive for Berkshire to repurchase its own shares compared to other investors. This tax, part of Joe Biden’s Inflation Reduction Act, aims to level the playing field between buybacks and dividends.

The Inflation Reduction Act introduced a 1% excise tax on stock repurchases after Dec. 31, 2022. The IRS delayed deadlines for reporting and paying the tax until last year. The tax was implemented to reduce the advantage of buybacks over dividends, which are taxed on individual taxpayers.

Buffett noted that the new tax significantly impacts Berkshire’s ability to buy back its own shares, as well as the companies it invests in, such as Apple. The tax raises the bar for when it is financially viable for Berkshire to repurchase shares, affecting their investment strategy moving forward.

Read more: New Tax Makes It Less Likely Berkshire Will Buy Back Shares